In the midst of one of the toughest economic periods in decades, Procter & Gamble Co.’s 13-member board on Tuesday elected Robert McDonald president and chief executive officer, succeeding A.G. Lafley, who will remain as chairman. McDonald, P&G’s chief operating officer, will begin his new role July 1.
In a conference call Wednesday with the investment community, Lafley expressed his confidence in the board’s decision saying, “We are obviously in the midst of a challenging time, but I believe it is the right time for a change….Bob is the right leader at the right time.”
McDonald said he is focused on preserving the core strategies at the firm, spelling out six points in particular. The first is filling white space where there are opportunities, such as Beauty & Grooming, a $250 billion industry, one where P&G’s market share is 15 percent.
Second is building upon the firm’s 27 various $1 billion brands, with a goal to end the decade with 30 or more of them. Growing in emerging markets was a third point, where McDonald explained that P&G is serving a little more than three billion of the six billion people in these regions, and that if P&G could increase spending levels in China and India to match those of Mexico, it would generate an increase of $40 billion in annual sales. The firm had $83.5 billion in sales for its latest fiscal year.
The fourth point was continuing with “big, disruptive innovation,” followed by improving productivity, and continuing to invest in P&G employees.
McDonald said next year will be a year of investing to grow value share and one that reflects “continuity with change.” For example, a focus will remain on “winning with the consumer,” but now it will apply more strongly to emerging markets.
Lafley added that the appointment has been a disciplined process, spanning years and led by the board, beginning as far back as 2000, when he was named ceo.
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